European shares knocked by political tension, China growth

LONDON, July 3 Wed Jul 3, 2013 3:10am EDT

LONDON, July 3 (Reuters) - Rising political tensions in the middle east, weak China growth and the resurfacing of debt worries in Europe were all enough to suppress European equities early on Wednesday.

The FTSEurofirst 300 fell 11.20 points, or 1.0 percent to 1,147.57, by 0707 GMT, echoing weakness overnight in Asia, with miners falling 1.2 percent after data revealed China's manufacturing growth hit multi-month lows in June.

Bund yields were rising too as political problems in the peripheral euro zone nations continued to generate nerves.

Portugal's prime minister refused to accept the resignation of his foreign minister on Tuesday, raising the stakes in a political crisis that could derail Lisbon's plan to exit an international bailout.

Meanwhile, nervousness over the state of Greece's next tranche of bail-out money also caused minor tremors among investors in the banks and insurers, which fell 1.7 percent and 1.3 percent, respectively.

"With disorder and uncertainty over the political situation in Egypt threatening stability in the Middle East, and a Greek deadline looming to prove it can action its bail-out conditions before receiving the next tranche of aid, volatility is likely to be high," Mark Ward, head of trading at Sanlam Securities, said.

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